The Westpac Banking Corp (ASX: WBC) share price is under the spotlight after the ASX bank share reported its FY26 half-year result.
Westpac is one of the largest banks in Australia and New Zealand, with a number of brands including Bank of St George and Bank of Melbourne.
Westpac FY26 half-year result
Here are some of the highlights from the bank’s result for the six months to 31 March 2026 compared to the second half of FY25, unless otherwise noted:
- Underlying net profit declined 1% to $3.5 billion
- Statutory net profit down 5% to $3.4 billion
- Statutory net profit up 3% year on year to $3.4 billion
- Interim dividend of $0.77 per share, up 1% year on year
What drove these numbers?
Westpac said that its customer deposits grew by 7% year on year and 3.1% half on half to $745.2 million.
Meanwhile, its total loans increased by 7.3% year on year and 4% half on half to $890.3 billion.
The bank noted that its Australian mortgages, excluding RAMS, grew by 1.2x the system over the half. It noted that the proportion of new loans originated during proprietary (its own, non-broker) channels rose during the year – up to 34% in HY26, an increase from 32.4% in HY25.
Australian business lending grew by 16%, with diversified growth in its target sectors of agriculture, health and professional services. There was also “strong loan growth” in its institutional division.
Westpac said it believes in the growth potential of regional Australia, opening three regional service centres and another to come.
The bank noted that a simpler operating model, reduced property footprint, digitisation and UNITE benefits contributed a combined $258 million towards the reduction of its expenditure reduction in HY26.
The Westpac dividend represents a dividend payout ratio of just over 75% of net profit generated.
Lending profitability
The bank reported that its core net interest margin (NIM) declined, which is how much profit it makes on its lending in percentage terms (including the cost of funding those loans).
Westpac reported that the core NIM fell to 1.78% in HY26, down from 1.82% in the FY25 second half and down from 1.8% in the FY25 first half.
Including treasury and markets, the NIM fell to 1.89%, down from 1.95% in the FY25 second half and 1.92% in the FY25 first half.
The bank also reported an impairment charge of $443 million during the HY26 period. Westpac said this relates to a revised economic outlook in its base case provision scenario.
Outlook for the Westpac share price
Westpac said that the Middle East war is presenting challenges for some customers and the impact of the conflict will “continue through the year”. It noted that some sectors are seeing more impacts than others.
It also noted it’s “ready to work with” the government to ensure Australia is better prepared for future events, including through ongoing investment in a reliable, sustainable energy system.
Westpac also suggested that as a country, Australia must “embrace the opportunity for genuine reform to ensure the nation remains competitive”.
I’m impressed by the loan growth rate that Westpac is achieving and I’d be happy if I were a shareholder, but it’s not one of the ASX dividend shares I’d buy first because of the slow growth rate of the dividend.
